A good mess?
Our economy is a mess. We lucky U.S. nortes are a lot wealthier than folks in other countries, so it could be argued that, relatively speaking, we have a good economy. The fact remains that, good or no, it’s a mess.
It’s convoluted, and it doesn’t seem to be making many of us happy. As for the unhappiness out there, there are plenty of studies showing that a population’s overall satisfaction is less about how poor its average member is than about how unevenly that wealth is distributed. The guy who lives in South America who can’t afford a refrigerator or a car but who never meets anybody who can is generally going to be more satisfied with his financial situation than somebody with a decked out kitchen and an old jalopy who has to bump shoulders with people who get rid of big-screen TVs because of a couple of dead pixels. But we already figured that, right?
As for the convolution, a lot of that has to do with lawyers and regulations. To way oversimplify what all of you already know: The left has simple faith that regulations will protect the little guy from being taken advantage of, and the right has simple faith that regulations will just make everything run less smoothly. Instead of working together to make sure that regulations passed actually do help rather than hurt, they spend their time trying to step on each other’s toes. All the while, both sides are working to keep the lobbyists and lawyers happy – the lobbyists and lawyers who are paid big bucks to make sure that their bosses can get around whatever regulations are put into play.
The result? The little guy gets bogged down with extra regulations, while his jumbo-sized competitors – the ones who have the money to outsource the paperwork to the same legion of lobbying lawyers who shaped the legislative process – get a guided tour through all the loopholes that let them ignore the spirit of the law.
But as much as I would like to see some effective, streamlined regulation going on – say, some accountability for the bankers playing Russian roulette with all that electronic currency floating around – I think some of the most fundamental ills with our economy boil down to trade.
Tariffs used to be a big deal in this country. Tariffs are basically hefty import taxes placed on goods from outside the country, and their purpose is simple: keep jobs inside the country when possible. Tariffs supplied the vast majority of the federal government’s revenues, too, until the income tax was introduced in the early 20th century.
Tariffs are the opposite of free trade, which for my purposes here, is simply the freedom to trade with whomever, wherever, without restrictions. (Okay, so embargoes are the real opposite of free trade.)
For the last hundred years, America’s government has been moving away from protectionism (using tariffs and other regs to protect local workers) and toward free trade, picking up more and more momentum as it’s done so. Economist and Reagan-adviser Milton Friedman made the case for free trade by equating a nation’s economy with a household: If you send less money out for more stuff, you have a net gain. In his eyes, protectionism put value on currency where it should have put value on goods: Gold coins and paper money are most valuable in that they can be traded for things we actually use, so keeping more money circulating here at home, when it could be buying more stuff by going overseas, was illogical.
The other major case for free trade is that it allows more competition, challenging local businesses to innovate so that everyone involved wins. If Detroit had started building cars that lasted as long their Japanese counterparts did in the 1980s, the reasoning goes, maybe the American car industry wouldn’t be dying. More Americans would have car-manufacturing jobs, and more people in more economic brackets would have working cars.
Service jobs and “Save money, live worse”
For several years now, I’ve been hearing more and more about how the U.S. needs to focus on raising its kids to do service jobs, rather than manufacturing. This is an admission, from all sides, that when it comes to manufacturing, we can’t compete with the international market. Any service job that can’t be handled via internet or phone, however, can’t be exported.
We can’t compete in manufacturing, with any level of innovation, because international competitors aren’t cutting prices through innovation. They’re cutting prices through serfdom. China’s minimum wage of 55 cents an hour is routinely ignored, and because many workers can’t afford to live elsewhere, much of their hourly wage goes back to the company for the room and board that looks suspiciously like something out of a Holocaust movie. (Here’s a case study in how Christian merchandise gets made over there.) But even if China’s labor laws stop being for show and start being enforced, do we really want our workers to compete for the right to get paid 55 cents an hour?
At the moment, Walmart’s slogan is “Save money, live better.” Considering that the money savings come from exporting jobs to China, that slogan epitomizes Milton Friedman’s economics. And, in a way, it’s working. Thanks in no small part to presidents Nixon and Clinton’s greeting Chinese imports with open arms, the average American has a lot more crap cluttering up his house. The net gain to our economy has been a lot of stuff. But it’s also helped make our economy top-heavy. Everything we buy puts money into the pockets of the big-wigs doing the importing, but very little of that money is sent back to us. When the money does come back, it’s for stocking the shelves at Walmart, not for building better blenders. Unemployment skyrockets, jobs go to people overseas who don’t actually get paid, and the unparalleled wealth of the United States gets more and more concentrated in the top two percent, the ones who are exporting the jobs to slaves.
Now, I’m not blaming the wealthy for our messed up economy. The nation as a whole has decided that the short-term payoff of a fancier microwave oven for less money trumps other considerations. Now, there is an increasing movement of young people who think the “cool” thing to drink is “fair trade” coffee they know was made for a living wage, and the cool thing to wear is fair-trade threads. God bless them for it. But the problem is so endemic to the American economy that I don’t see that as a fix. Unless I’m wrong, people will keep buying the cheaper stuff, not just out of selfishness but out of the belief that their voting dollars won’t make a difference because others will take the deal if they pass it up.
I think the solution is simple. Whether we’ll ever get there or not… Well, I can hope.
There are two sides to the problem: First, exporting jobs to be done by serfs and slaves is wrecking our economy by creating a huge wealth gap that will eventually reduce us all to serfs and servants, yes. But second, and far more important, is the fact that by accepting these cheap goods, we are morally responsible for enslaving people around the world.
The simple solution is to stop it. And if we’re not going to do that as individuals, we have to do it as a collective. Which is kind of the point of a representative government: “We the people” have the option of setting the agenda and having it enforced from the top down. Self-imposed regulation, in its own way.
We need to pass a law that would simply say “We’re not taking goods that victimize other people or ourselves. Goods that are made by taking advantage of people are now illegal in this country.” And then we need to enforce it, either by setting up a government agency to investigate this stuff or letting the non-profits that would love to help more dog it for us. Stepping-stone bills like the Decent Working Conditions and Fair Competition Act have been introduced before, but they keep dying. This needs to stop.
We might have to live with the dead pixels in our TV screens for a few extra years, but it’ll be worth it.